The Contradictions Between GOP Trade And Antitrust Policies
Life is full of contradictions. Politics even more so. But with Donald Trump leading the Republican party into protectionism, some of these contradictions are getting harder to reconcile. Trump’s decision to impose tariff’s on solar panels and washing machines is the first time the US has imposed such protectionist measures since George W. Bush levied steel imports in 2002. That effort was eventually taken to the WTO where the US lost the case in 2003 and Bush withdrew the tariffs.
This effort is likely to eventually suffer the same fate. If Trump defies a future WTO ruling or China and/or South Korea decide to impose their own retaliatory tariffs, we could see the beginnings of a total breakdown in the global trading system, something you would think the US business community would be loathe to provoke.
There are concerns that these tariffs will raise prices on both products. In particular, higher prices for solar panels could end up costing jobs in the solar energy industry, especially among solar installers. Solar energy employment is one of the fastest growing areas of our economy and one industry group believes these tariffs will cost 23,000 jobs.
On the other hand, the current Republican view on antitrust relies on a policy created during the 1970s that maintains a merger would not violate antitrust rules if it can be shown the consumer would ultimately benefit. For the last four decades, mergers that ended up costing American jobs but produced lower prices for consumers went ahead with the Republican party’s full blessing.
So, now the GOP is in a position where Trump’s protectionism directly conflicts with Republican antitrust policy. According to today’s rules we must force consumers to pay higher prices for imported goods in order to protect American jobs. But American companies can eliminate jobs freely as long as it lowers the price for consumers.
As I say, life is full of contradictions. But the one thing that reconciles this contradiction are the plutocrats that benefit from both these policies.
